02.02.202600:20:13UTC+00Silver Remains Volatile After 26% Plunge

Silver prices experienced significant volatility on Monday, plunging by as much as 7% to approximately $79 per ounce before stabilizing above $85 per ounce. This dramatic shift comes in the wake of Friday's unprecedented 26% drop, marking the steepest decline in the metal's history. This downturn was triggered by the announcement that U.S. President Donald Trump intends to nominate Kevin Warsh as the next Federal Reserve Chair, a choice viewed as significantly more hawkish. Investors engaging in profit-taking contributed to the decline, following a robust rally that had previously driven silver to record highs.

The earlier surge in silver prices was fueled by a structural deficit in the market, alongside a trend known as the "debasement trade." This trend saw investors shifting their focus from traditional currencies and bonds towards physical assets, driven by apprehensions regarding increasing government debt levels. The metal's safe-haven status was further bolstered by geopolitical and economic uncertainties, coupled with concerns about the Federal Reserve's independence. Additionally, momentum buying played a critical role in the price ascent, with significant contributions from Chinese speculators who, upon realizing profits, exacerbated the sell-off.